Question

the table below represents a firms profit for producing and selling blu ray players. using the marginal costs and marginal revenues provided, at what level of output does the firm maximize profits?

quantity (q)	total cost (tc)	marginal cost (mc)	total revenue (tr)	marginal revenue (mr)
10	$90	$2.80	$40	4.00
20	$110	$2.00	$80	$4.00
30	$126	$1.60	$120	$4.00
40	$138	$1.20	$160	$4.00
50	$150	$1.20	$200	$4.00
60	$165	$1.50	$240	$4.00
70	$190	$2.50	$280	$4.00
80	$230	$4.00	$320	$4.00
90	$296	$6.60	$360	$4.00
100	$400	$10.40	$400	$4.00
110	$550	$15.00	$440	$4.00
120	$715	$16.50	$480	$4.00

Explanation:

Step1: Recall profit - maximization rule

A firm maximizes profit when $MR = MC$ (marginal revenue equals marginal cost).

Step2: Check the table

We look for the quantity level where $MR = MC$. From the table, when $Q = 80$, $MR=\$4.00$ and $MC = \$4.00$.

Answer:

80